= Morris has the utility function U (b, w) b+w and Philip has the utility...

 

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= Morris has the utility function U (b, w) ≤ b+w and Philip has the utility function U (b, w) = bw, where b is the number of books consumed per month and w is bottles of wine consumed per month. If we draw an Edgeworth box with books on the horizontal axis and wine on the vertical axis and if we measure Morris's consumptions from the lower-left corner of the box, then which of the following could be the condition for a Pareto-optimal allocation? bw = 1 Ob-w=1 Ob+w=1 Ob=w = Morris has the utility function U (b, w) ≤ b+w and Philip has the utility function U (b, w) = bw, where b is the number of books consumed per month and w is bottles of wine consumed per month. If we draw an Edgeworth box with books on the horizontal axis and wine on the vertical axis and if we measure Morris's consumptions from the lower-left corner of the box, then which of the following could be the condition for a Pareto-optimal allocation? bw = 1 Ob-w=1 Ob+w=1 Ob=w

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d b w The condition for a P are to opt imal allocation is that it is no... View the full answer